An Investigation on the Innovations in Steel Re-Rolling MSMEs with reference to industries in Kerala State, India Kiron K.R. 1, a , Dr. Kannan K. 2,b 1 Research Scholar, Department of Production Engineering, PSG College of Technology, Coimbatore, India 641 004 2 Assistant Professor (Sr.Gr.), Department of Production Engineering, PSG College of Technology, Coimbatore, India 641 004 a krkiron@gmail.com, b kannan_psg@yahoo.co.in Keywords: Innovation, MSMEs, Steel Re-Rolling Industry, Kerala, Developing countries Abstract. A developing country like India depends on Micro, Small and Medium Enterprises (MSMEs) for its economical development. But the sector is not attractive now for the entrepreneurs, since the return for investment is very small. These organisations have to practice the habit of innovation for their survival. The present study focused on the extent of innovations in steel re- rolling MSMEs in Kerala state, India. Also, the barriers for innovation are identified so that the same can be overcome by the planned efforts. The data collection is through a field survey based on a questionnaire prepared. The study shows that level of innovation is very low in MSME sector and proper steps are to be taken to overcome this issue. Introduction The Micro, Small and Medium Enterprises (MSMEs) have a significant role in the economic development of developing countries like India. The ability to create employments with very low investments makes them most important. With the growth of the economy after economic reforms in 1990s, the focus of the Indian MSMEs has shifted to the creation of more value addition in goods and services. IIFT and FICCI [1] pointed that, MSMEs contribute 80 percent of the total industrial enterprises in India, with a growth rate of 10.8 percent. Eight percent contribution to the total GDP is from MSMEs. But the situations are not favorable for the entrepreneurs in this sector. It is very difficult to establish a successful MSME in any sector of the industry. Raj [2] identified that the technical efficiency is very low in the informal manufacturing sector in India. This is having adverse effect on the returns for investment for the entrepreneurs. Competition from the domestic and global market is increasing day by day. The sub-optimal scale of operation makes MSMEs inferior to its global competitors. Maiti and Sen[3] pointed that the small scale sector in India should give importance to the complexity and heterogeneity of production and labour relations that exists in the sector. The manufacturing strategies are changing in high pace. It results in obsolesce of technology, which is another problem faced by the MSME’s. Also, in the uncertain and turbulent market scenario, MSMEs have to fight with its supply chain inefficiencies. To survive in the situation, MSMEs need to adopt a culture of innovation. Damanpour [4], explained on the adoption of innovation changes the organization, but the level of innovation adoption varies with organization. Becheikh et.al. [5] pointed that the organisations must practice the art of innovation in order to maintain a competitive advantage. Kathuria and Natarajan [6] emphasized that manufacturing sector is acting as an engine of growth in India after the economic reforms of 1990.They also pointed that the contribution of manufacturing sector over service sector on state domestic product is declining in almost all Indian states. And this makes the manufacturing MSMEs important. Among the manufacturing companies, steel manufacturing companies have a predominant role. The position of Indian steel manufacturing companies is among the leading players. [7] According to Krishna et.al.[8], Indian companies are growing as the result of research and innovations. But, there are barriers for innovation also. Management capability, policy issues and financial scarcity are the Applied Mechanics and Materials Vols. 592-594 (2014) pp 2711-2715 Online available since 2014/Jul/15 at www.scientific.net © (2014) Trans Tech Publications, Switzerland doi:10.4028/www.scientific.net/AMM.592-594.2711 All rights reserved. No part of contents of this paper may be reproduced or transmitted in any form or by any means without the written permission of TTP, www.ttp.net. (ID: 117.251.7.191-13/08/14,10:31:36)